Solomon Motors Ltd v Budget Rent a Car Corporation [1999] SBHC 107; HC-CC 215 of 1999 (1 November 1999)

HC-CC No: 215 of 1999

SOLOMON MOTORS LIMITED

-V-

lass="Mss="MsoNormal" align="center" style="text-align: center; margin-top: 0; margin-bottom: 0"> BUDGET RECAR CORPORATION

AND BUDGET RENT A CAR INTERNATIONAL INC.

HIGH COF SOLOMON ISLANDS

(PALMER J.)

CIVIL CASE NUMBER 215 OF 1999

HEARING: 14^th SEPTEMBER 1999

class="MsoNormal" style="margin-top: 0; margin-bottom: 0"> 0"> JUDGMENT: 1^st NOVEMBER 1999

SOL-LAW FOR THE PLAINTIFF

R. MEYERS AND RAMONA WILSON FOR THE DEFENDANTS

class="MsoNoMsoNormal" style="margin-top: 0; margin-bottom: 0"> PALMER J.: n> There are two applications b before this Court. The first one is a Summons filed 26th July 1999 by Budget Rent A Car Corporation ("Budget Corporation") and Budget Rent A Car International Inc, ("Budget International") the First and Second Defendants, (hereinafter referred to as "the Defendants") for the following orders:

"1. That the Writ of Summon filed by the Plaintiff in Civil Case No. 215 of 1999 on 9 on June 10, 1999 and Summons filed by the Plaintiff in Civil Case No. 218 of 1999 on June 10, 1999 be struck out under Order 21, Rule 29 and Order 27, Rule 4 of the High Court (Civil Procedure) Rules 1964 and / or the inherent jurisdiction of the Court on the grounds that:

(a) &nthey are unnecessecessaryssary or scandalous;

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(b) areyan a use of the the process of the Court;

pan lEN-GBle="font-size: 12.0 12.0pt">&pt"> nbsp;

(c) &nbsey tend to jupree,dice,dice, embarrass or delay the fair trial of the action in Civil Case No. 182 of 1999; and

(d) &nbspy are frivolous and vexatious."

The second Summons was filed on 10th June 1999 in Civil Case 218 of 1999 for orders inter alia that:

"1. Soatutemy D oand of d the Respondent dated 14 May 1999 and served on the Applicant on 20 May 1999 be set aside.

2.  p; &nsp;&nIn the alternative, a a stay of proceedings on the Statutory Demand pending judgment in High Court Civil Case No. 215 99 anil CaiginaSummons No. 182 of 1999 1999."

This was then followed by a Notice of Motion filed 28 July 1999h sought orders similar to r to the Summons filed 10th June 1999. I quote:

class="MsoNoMsoNormal" style="text-indent: -34.9pt; margin-left: 70.9pt; margin-top: 0; margin-bottom: 0"> &q. That Budget R nt A t A C Car Corporation and Budget Rent A Car International Inc be restrained from filing or advertising any petition to wind up Solomon Motors Limited until after the hearing and determination of the summons of Solomon Motors Limited to set aside the statutory demand of Budget Rent A Car Corporation dated 14 May 1999 and served on Solomon Motors Limited on 20 May 1999, the hearing and determination of the originating summons for declarations regarding termination of contract in Civil Case No. 182 of 1999, the hearing and determination of Writ No. 238 of 1999 and Writ No. 215 of 1999."

CIVIL CASE NO. 215 OF 1999

The Statement of Claim in Civil Case No. 215/99 was fon 28 July 1999. The facts as pleaded are summarised ised as follows. In or about 30 November 1981, Budget Corporation entered into a written agreement ("the Head Agreement") with Budget Rent A Car System Pty Ltd ("BRACS"), an Australian based company whereby Budget Corporation licensed to BRACS the right to use certain intellectual property including the use of the name "Budget Rent A Car" and a system of operating standardised motor vehicle hire outlets in certain territories including Solomon Islands. Sometime in or about 1984, BRACS entered in turn into a sub-licence agreement ("the Agreement") with Solomon Motors Limited, the Plaintiff ("Solomon Motors") to operate a motor vehicle hire business within Solomon Islands utilising the Budget Rent A Car name and system and other intellectual property. A copy of that Agreement is annexed to the affidavit of Ramona Wilson filed 10th September 1999. Clause 19.2 of the Agreement provided inter alia, that in the event of termination of the Head Agreement, Budget Corporation would be substituted for BRACS as a party to the Agreement and Budget Corporation would be entitled to assign its rights and obligations under the Agreement. In or about April 1990, BRACS went into liquidation. Budget Corporation was substituted automatically thereafter. No dispute appears to be taken about this. Following the substitution, problems arose. Budget Corporation and Budget International alleged breaches of certain clauses of the Agreement. Details of these are set out in the Statement of Claim filed on or about 16 July 1999 in Civil Case Number 238 of 1998 at paragraphs 14 - 17. These were disputed by Solomon Motors right from the beginning (see affidavit of Steve Theodore Patrick filed 10th June 1999 - exhibits STP1, STP4 and STP5). By letter dated 5 January 1999, the Defendants served on Solomon Motors a Notice of Default dated 30 December 1998 requiring Solomon Motors to rectify the breaches alleged within thirty days of receipt (see clause 18 and 19 of the said Statement of Claim). The breaches (being disputed) were not rectified within the time required. By letter dated 8 February 1999, the Defendants gave notice of termination of the Agreement to Solomon Motors. The Defendants claim Solomon Motors is indebted to them for monthly service fee payments for inter alia, the period April 1995 to July 1996 in the sum of SBD75,536-34. On 20 May 1999, the Defendants served on Solomon Motors a Statutory Demand pursuant to section 211(a) of the Companies Act, demanding payment of the SBD75,536-34 within three weeks of that date (see affidavit of William David Ramsay filed 28 July 1999 Exhibit WDR9). On same date Defendants filed Originating Summons in Civil Case No. 182 of 1999 seeking declarations inter alia, that the Agreement had been effectively terminated on February 7 1999. As early as 28 May 1999 Solomon Motors by its solicitors disputed the debt, gave notice of a genuine dispute and called on the Defendants to withdraw the Demand by 4.00 p.m. on 1 June 1999 or Solomon Motors would apply to Court for orders to set the Demand aside. On 4 June 1999 Solomon Motors instructed its solicitors to hold the sum of SBD75,536-34 in their trust account for the purposes of this matter and to offer to pay said amount into Court to abide decision of Court. Solomon Motors issued its Writ of Summons in Civil Case Number 215 of 1999 on 9 June 1999 and filed Statement of Claim on 28 July 1999.

The claim of the tiff can be summarised under two grounds. The first alleges the existence and breach each of certain terms in the Agreement, either expressed or implied, and in the alternative, in a collateral agreement (see paragraphs 7 and 8 of the Statement of Claim). The terms alleged read as follows:

(a) &nnbsp;; that Budget Rent Rent Rent A Car System Pty Ltd ("BRACS") would at its cost advertise the Plaintiff's bus boternatly and regionally in relevant magazines brochures and trade manuamanuals, wls, wherebhereby the Plaintiffs business would be advertised as part of the international and regional Budget Rent A Car network;

(b) &nbssp;&nthat BRat BRACS woCS would at its cost maintain an international and regional referral system whereby the Plaintiff would make and receive international and regional vehicle h ngs;

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(c) &nbbsp;& that BRACS wouldwouldwould ensure that such referrals under the said system were made to the Plaintiff by other intionalregioudget vehicle hire operators."

Solomon Motors claims the First Defendant had since in or about July breached term (a) above, bye, by failing or neglecting to advertise the Plaintiff's business internationally and regionally as part of the Budget Rent A Car network. It also claims terms (b) and (c) above were breached by the First Defendant since in or about April 1997 by failing or neglecting:

(a) &nnbsp;;&nbs maio maintain tain an international and rend regional referral system whereby the Plaintiff would be able to mnd re international and regional vehicle hire bookings; and

p class="MsoNoMsoNormal" style="text-indent: -34.9pt; margin-left: 70.9pt; margin-top: 0; margin-bottom: 0"> (b) & to ensu ensure that such refe referrals were made to the Plaintiff by other international and regional Budget vehicle hire operators.

It sets out its claim for losses and damages incurred in paragraphf the Statement of Claim.

The second ground relied on pertains to the question of termination of the Agreement. Thithe subject also, rai, raised in Civil Case No. 182 of 1999 by the Defendants (as First and Second Plaintiffs respectively) seeking declarations that the Agreement was terminated on February 7 1999, whereas the Plaintiff claims (in Civil Case No 215 of 1999) termination was effected on 4th June 1999.

TRIABLE OR SERIOUS ISSUES

The first issue whiches for consideration when dealing with the Summons of the Defendants is whether there are triable issues raised in the Statement of Claim of the Plaintiff (Solomon Motors) in CC 215/99. The Defendants argue the issues raised pertaining to the terms pleaded as forming part of the Agreement were (i) unnecessary or scandalous; (ii) an abuse of the process of the Court; (iii) tend to prejudice, embarrass or delay the fair trial of the action in Civil Case No. 182 of 1999; and (iv) are frivolous and vexatious.

ass="MsoNoMsoNormal" style="margin-top: 0; margin-bottom: 0"> The Plaintiff relies primarily on the other hand on the evidence containedhe affidavit of William m David Ramsay filed 10th June 1999 at paragraphs 4 to 6. Learned Counsel Bob Meyers takes objection with the admissibility of this information on grounds it contains second hand hearsay evidence. Unfortunately that overlooks the fact Mr Tomlin was at the alleged time the General Manager of the Plaintiff company and therefore a person directly involved in the negotiations with Bob Ansett and others on behalf of BRACS. Order 40 rule 3 of the High Court (Civil Procedure) Rules 1964 allows an affidavit to contain statements of information and belief. The material sworn to by Mr Ramsay as to his information and belief for purposes of this application, contrary to the submissions of Mr Meyers, is admissible evidence. That, with respect, at this point of time is evidence of the terms of the Agreement whether express or implied, and in the alternative that they were terms of a collateral contract between the parties. Evidence in support of the alleged breaches is also contained in the affidavit of Mr Ramsay at paragraphs 6 - 16, and in respect of the referrals system in paragraphs 17 - 19. Questions of proof are matters properly left for determination at trial after hearing of evidence.

class="MsoNoMsoNormal" style="margin-top: 0; margin-bottom: 0"> Further, the question whether the terms alleged can be implied to give bss efficacy to the Agreemeneement at this point of time is a matter properly left for determination at trial.

One of theial submissions raised by the Defendants against the Statement of Claim pertains to t to the principle of novation. They argue clause 19.2 had the effect of a novation when BRACS went into liquidation in 1990 and was substituted by Budget Corporation. In consequence, whatever rights existed under the original contract were extinguished with the novation; that included the alleged rights contained in the terms claimed by the Plaintiff to be part of the Agreement as express or implied terms or part of a collateral contract. A number of authorities were referred to in support (see Cheshire and Fifoot's Law of Contract paragraph [8.49]; Olson v. Dyson [1969] HCA 3; (1969) 120 CLR 365 at 388-389; Bailey "Novation" 1999 14 Journal of Contract Law 189 at 204).

Thnovation had occurred pursuant to clause 19.2 is not in dispute. This much is concedenceded by the Plaintiff. The issue whether the rights and obligations under the substituted contract or new contract (between the Plaintiff and Budget Corporation) included the terms claimed by the Plaintiff to have been breached is not as clear cut and obvious as sought to be argued by learned Counsel for the Defendants. Their inclusion as part of the terms of the substituted Agreement will depend on the initial arguments whether they formed part of the Agreement as express terms or implied terms or as part of a collateral contract. What is clear to me at this point of time is that this is a triable issue, to be determined on the evidence of the parties at trial. Secondly, it will depend on the construction of clause 19.2 whether those rights and obligations were also transferred and became part and parcel of the new substituted Agreement (see comment of Julian Bailey in his Article "Novation" (ibid) at page 204 in which the learned Author states: "In each case, it is up to the parties to the new contract to decide what they want their respective rights and obligations to be under that contract.") Again this is a matter for submission at trial proper.

One of the submissionsed by the Defendant against the inclusion of the terms claimed by the Plaintiff to have been breached pertained to the question of knowledge. It denies knowledge of the existence of those terms and that accordingly the novated contract could not have included those terms. Unfortunately that is a matter that is not conceded by the Plaintiff and therefore an arguable issue and a matter proper for trial.

Further, the Plaintiff's claim was that the said terms fopart of the Agreement and or in the alternative, were were part of a collateral contract, and thereby survived the novation. If for instance, those terms were to be implied to give business efficacy to the Agreement then surely the argument whether they survived the novation is a triable issue (see Codelfa Construction Pty Ltd v. State Rail Authority of NSW (1982) 149 CLA 337, 345-356).

Another argument sought to be raised against the claim of the Plaintiff was tt was now statute bar barred. Unfortunately it overlooked paragraphs 10 and 11 of the Statement of Claim which pleaded the breaches were committed in or about July of 1994 and April of 1997. That cannot be statute barred.

class="MsoNoMsoNormal" style="margin-top: 0; margin-bottom: 0"> One of the arts raised by the Defendants also pertained to the application and effect of clause 27se 27 of the Agreement. Unfortunately the effect of that clause and the application of the parol evidence rule in excluding any implied terms or the existence of a collateral contract is not conceded by the Plaintiff and therefore a matter properly to be tried at trial. The question whether terms should be implied in the new Sub-Licence Agreement between Budget Corporation and the Plaintiff is a matter for argument at trial (see Codelfa Construction Proprietary Limited v. State Rail Authority of New South Wales 149 C.L.R. 337, 345-356 [Mason J].

In the circumstances I am satisfied there are triable issues r in the Statement of Claim laim and that these are not unnecessary, scandalous, an abuse of process, frivolous or vexatious or tending to prejudice, embarrass or delay the fair trial of the action in civil case no. 182 of 1999. It is clear on evidence before me the claims of the Defendant had been resisted right from the beginning. I am also satisfied the issues raised in the Statement of Claim are triable issues. The Summons of the Defendants must be dismissed.

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APPLON TO SET ASIDE STATUTORY DEMAND

class="MsoNoMsoNormal" style="margin-top: 0; margin-bottom: 0"> A number of grounds are relied on by Plaintiff in support of applicationet aside demand. The first irst one raised is that the demand is defective in that it calls for payment of an alleged debt by Solomon Motors in Solomon Islands Dollars. The Agreement requires all payments made pursuant to the Agreement to be paid in Australian currency in Melbourne at BRACS's address in Australia unless otherwise directed in writing by BRACS (clause 18.3). Unfortunately, this submission overlooks the fact that Budget Corporation had in fact nominated the currency to be paid by indicating to Solomon Motors the amount due as contained in the affidavit of Russel Imaoka sworn in Melbourne, Australia on May 14 1999 at paragraphs 8-11. With respect I fail to see any defect in the way the Demand is made.

class="MsoNoMsoNormal" style="margin-top: 0; margin-bottom: 0"> The second ground relied on is that the Plaintiff denies being indebted to the Defendant for the sum (SBD75,536-34) claimed in the demand as owing. Even if said sum is owed, it argues the counter-claim (that is claim in civil case 215/99) for a greater sum would off-set whatever amount is owing and therefore there is genuine dispute to the debt claimed. Thirdly, Plaintiff argues, it is not insolvent. At no time when Demand was made had it given impression it was unable to meet Demand. What it did make clear was the existence of a genuine dispute and therefore Demand should have been withdrawn by Defendants instead of persisting in issuing threats to have the Plaintiff petitioned for a winding-up order. Fourthly, Plaintiff argues it had made it clear from the beginning that it was prepared to pay Demand into Court to abide the decision of the Court pending determination of the issues raised by the Defendants which are disputed and therefore its claim cannot be said to be frivolous, vexatious or done with intent to delay claims of the Defendant pursued in Civil Case 182 of 1999 or Civil Case 238 of 1999.

THE LAW ON WINDING UP

Section 210 of the nies Act provides a company may be wound-up by the court if inter alia, it is u unable to pay its debts. Section 211(a) gives the statutory definition of inability to pay. I quote:

"A company shall be dee to be unable to pay its debts-

(a) if a creditor, by assignment or t or otherwise, to whom the company is indebted in a sum exceeding one hundred dollars then due has served on the company, by leaving it at the registered office of the company, a demand under his hand requiring the company to pay the sum so due and the company has for three weeks thereafter neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor;"

class="MsoNoMsoNormal" style="margin-top: 0; margin-bottom: 0"> A prerequisitfiling petition under section 211(a) is that the petitioner is a creditor. In this is case, the Defendants claim they are creditors and owed money to the tune of SBD75,536-34. Unfortunately this claim has been disputed right from the beginning (see Exhibit JK1 in affidavit of John G. Katahanas filed 28 July 1999). This is also confirmed by the conduct of the Plaintiff in response to the demand which is consistent with that of a person who has a genuine dispute.

>Re Clem Jones Pty Ltd [1969] QLR 14, 16 a demand for the sum of $6,440-00 had bead been made by the petitioner (Colin Frank Follett) to the company (Clem Jones Pty. Ltd.). That demand had not been met. The company had sought by notice of motion an injunction against the advertisement of the winding-up petition, asserting that presentation of petition in the circumstances amounted to an abuse of process of the court because there had been no neglect by the company within the meaning of section 222 of the Companies Acts 1961 to 1964; a provision similar to our section 211. Counsel for the company argued debt was disputed and that company was solvent. An injunction was sought to restrain further proceedings on petition. The Court found there might have been some money owing to the petitioner. On question of disputed debt, Court found there was counter-claim against the petitioner for a greater sum. I quote:

&que fact that the claim is in effect a counterclaim against the petitioner appears to j to justify a conclusion that the petitioner's debt is disputed, provided it be established that the claim is bona fide and one of substance".

It was held by the Court there was a substantial dispute and concluded the company had not neglected to comply with the petitioner's demand. His Lordship Mathews J. made the following conclusion:

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"In my vie differences between the parties should by common lawn law action be resolved before the company is subjected to the damage which seems to be presumed to flow from continuance of winding up proceedings. On that basis, 1 propose to grant an injunction."

The facts in Clem Jones Case are very similar to the facts in this case. A genuine dispute exists between the parties. There had been a counter-claim made against the Defendants for a greater sum which is not scandalous or unnecessary, frivolous or vexatious. It is bona fide and has substance. Secondly, the Plaintiff company is solvent. Clem Jones Case is clear authority for the proposition that in such circumstances, a restraining order should be made.

The case of Mann v. Goldstein [1968] 1 W.L.R. 1091 also supports that proposition. At page 1093-1094, his Lordship Ungoed-Thomas states:

"It is well established that thist has jurisdiction to restrrestrain the presentation or advertising of a winding-up petition and restrain all further proceedings on it. That jurisdiction is a facet of the court's inherent jurisdiction to prevent an abuse of the process of the court. It will be exercised where a winding-up application is presented or prosecuted otherwise than in accordance with the legitimate purpose of such process.

The presentation of petition is governed by statutory provision. Section 22on 224 of the Companies Act, 1948, provides that an application to wind up a company shall be by petition presented, so far as material for present purposes '.... by any creditor or creditors....' The section seems to me plainly, on the face of it, exhaustive, so that a person not within its ambit cannot petition. This conclusion is in accordance with the note in Buckley on the Companies Act (13th ed. (1957), p. 462), based on the observation of Wynn-Parry J. in In re H. L. J. Bolton Engineering Co. Ltd. Of course, a person not named in section 224 as a person entitled to present a winding-up petition, does not become so named because the company is insolvent. Therefore, so far as material to our case, if the defendants are not creditors they are not entitled to present or advertise their petitions or apply for a winding-up order; they have no locus standi, and their petitions are bound to fail even though the company be insolvent. So if a creditor's petition is not restrained by such an application as is now before me and comes before the Companies Court, that court will, in limine, before proceeding further, consider the petitioner's claim to be a creditor.

..... What the Companies Court will not do is to proceed any further at all on a petition founded on a debt which is not thus shown in limine to exist, for in such a case there is not, of course, the necessary creditor required by section 224 to apply for a winding-up order."

class="MsoNoMsoNormal" style="margin-top: 0; margin-bottom: 0"> At page 1095, his Lordship continues:

"But there is no authority, so far as I have been able to ascertain, to support the suggestion that a company might be wound up on a creditor's petition where the company is insolvent though the debt upon which the petition is founded is disputed."

p class="MsoNoMsoNormal" style="margin-top: 0; margin-bottom: 0"> His Lordship makes the final conclusions:

"For my part, I would prefer to rest the jurisdictirectly on the comparativeltively simple propositions that a creditor's petition can only be presented by creditor, that the winding-up jurisdiction is not for the purpose of deciding a disputed debt (that is, disputed on substantial and not insubstantial grounds), since, until a creditor is established as a creditor he is not entitled to present the petition and has no locus standi in the Companies Court; and that, therefore, to invoke the winding-up jurisdiction when the debt is disputed (that is, on substantial grounds) or after it has become clear that it is so disputed is an abuse of the process of the court

... So I return to what was mentioned earlier in this judgment, that it is an abuse of the process of the court to prosecute a winding-up application otherwise than in accordance with the legitimate purpose of such a process. The legitimate purpose of such a process is to wind up a company on a ground specified in the Companies Act, which, so far as material to this case, is the ground that it is unable to pay its debts. It is not its legitimate purpose to decide whether a petitioner claiming to be a creditor is a creditor, because section 224 makes it a prerequisite that he should be a creditor before he is even entitled to present a petition at all and before any consideration of the company's insolvency can become relevant. So, in my view, when a petitioning creditor's debt is disputed on some such substantial ground this court should restrain the prosecution of the petition as an abuse of the process of the court even though it should appear to the court that the company is insolvent."

class="MsoNoMsoNormal" style="margin-top: 0; margin-bottom: 0"> See also In re A Company 2 Ch 1894 349; in which it was held if ation for winding-up is not not presented in good faith and for the legitimate purpose of obtaining a winding-up order, but for other purposes, such as putting pressure on the company, the Court had inherent jurisdiction to prevent an abuse of process and may restrain the advertisement of the petition. In Cadiz Waterworks Company v Barnett [1874] L.R. 19 Eq. 82; it was held a creditor of a solvent company whose debt is bona fide disputed will be restrained from presenting a petition for winding up of a company. See also In re Gold Hill Mines [1883] UKLawRpCh 22; [1883] 23 Ch D 210; and In re L.H.F. Wools Ltd [1970] 1 Ch 27

The Plaintiff also rely on the case of In re Imperial Guardian Life Assu Society [1869] L.R. 9 R. [1869] UKLawRpEq 210; 9 Eq. 447; 450 as supporting its case that a winding-up petition is not to be used as a machinery for trying a common law action. In this case, the Defendants claim damages for breaches of the Sub-Licence Agreement entered into with the Plaintiff but which is disputed by the Plaintiff. The proper course of action would have been to have that action tried first.

In Theiss Peabody Mitsui Coal Pty Ltd v A. E. Goodwin Ltd (1966) QD. R. 1 it was held the prov provision relating to winding-up, section 222(2)(a) [similar to our section 211(a)], was intended to be operated and can only be operated when there was a genuine debt exceeding the statutory amount; in our case the sum of $100-00. It was not intended to by-pass the ordinary jurisdiction of the Court to determine whether there was a genuine dispute as to liability and to resolve the dispute where it exists. It should not be tolerated as a means to oppress the debtor company. In this instance, there being a genuine dispute in existence, the proper course of action to take would be to have that dispute resolved first. The petition should not be permitted to be proceeded with. To do so would not only be to oppress the debtor company but would cause damage to the reputation of the company.

The Plainalso rely on the case of Charles Forte Investments Ltd v Amanda [1963] 3 WLR 6WLR 662, 674 for the proposition that the Court will invoke its inherent jurisdiction to prevent the presentation of a petition which is bound to fail as this is an abuse of the process of the Court. The Plaintiff submits even if the petition is presented in this court, it is bound to fail. He points out the amount demanded had actually been realised and paid into court. There is no grounds whatsoever therefore to say that the Plaintiff is unable to pay its debts if any. The Plaintiff points out and rightly so, if the Defendant should win its case at the end of the day the said amount will be paid out.

The Court also haisdiction to dismiss a petition with costs where it is shown the object of the petition was not to obtain a winding-up order but to put pressure on the debtor to pay - see In re London and Paris Banking Corporation [1874] UKLawRpEq 171; (1874) L.R. 19 Eq. 444, 448 (Jessel MR); Charles Forte at 675-676 (Danckwerts LJ) and 677 (Cross J); and In re a Company [1894] UKLawRpCh 61; [1894] 2 Ch 349, 351 (Vaughan Williams J.). In the facts of this case, Plaintiff argues the whole process is designed to put undue pressure on Solomon Motors in circumstances where the debt is clearly disputed; if not there is a counter-claim for a set-off which is greater than the Demand.

CONCLUSION:

It is clear from court authoritiat any petition founded on the Demand is bound to fail. Not. Not only is there a genuine dispute as to liability to pay but that it cannot be said in the circumstances of this case the Plaintiff had neglected to pay the said sum. At the earliest possible time (see affidavit of Steve Theodore Patrick filed 10th June 1999) the debt claimed in the Demand had been disputed. Further the Plaintiff is solvent. As well, as early as 4th June 1999, well within the period of twenty one days of service of Demand, the Plaintiff instructed its solicitors to hold the said sum of SBD75,536-34 in their trust account and to offer to pay said amount in Court to abide decision of Court. It is my respectful view the said Demand should be set aside with costs. The Plaintiffs have asked for costs on indemnity basis. In my respectful view that is inappropriate in the circumstances of this case. The Plaintiffs however are to have their costs on party and party basis.

ORDERS OF THE COURT:

1. &nbbsp;& &nsp; issp;iss Summons ofDehe Dehe Defendants filed 26th July 1999.

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2. &nbssp;&nnsp;& Ssp; Ssp; Sep; Set aside Statutory Demand of Budget Corporation dated 14 May 1999.

class="Mss="MsoNormal" style="text-indent: -34.9pt; margin-left: 70.9pt; margin-top: 0; margin-bottom: 0"> 3.  p; The Plfinti s are tare to have their costs in this matter.

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THE COURT

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